Hip-hop mogul Ye, formerly known as Kanye West, is not the only one taking a huge financial hit from the fallout of his series of controversial remarks about Jews.
Following the plunge in the rapper’s estimated net worth from more than a billion to $400 million, a recent analysis by the Financial Times shows that Ye’s former partner Adidas also faces severe financial consequences.
Adidas has $530 million worth of Ye merchandise, which it hopes to unload at a steep discount. How the shoe company will manage that remains a mystery. Adidas’ employees have worried for years that the shoe giant was too reliant on the Yeezy brand.
The German sportswear giant is now trying to sell the items under its own brand to minimize potential losses, according to the report.
In 2022 alone, Yeezys made Adidas upwards of $1.8 billion … and made up around 7% of its total profits. The report also says Yeezy has stayed strong as a constant product in the Adidas wheelhouse since at least 2019, which might explain why Adidas took so long to finally cut ties with Kanye — he was literally its cash cow reported by TMZ.
The company previously announced it expected to lose $246 million in profit this year due to canceling the arrangement with Ye. Yeezy provided Adidas with an estimated $1.7 billion in annual revenue in 2021, or 8% of the total.
“As publicly communicated on October 25, we had terminated the partnership with Ye immediately, ended production of Yeezy branded products and stopped all payments to Ye and his companies,” Adidas finance chief Harm Ohlmeyer said that month in a comment to USA Today.
Insiders at Adidas told the paper that while some of its franchises suffered financial losses in 2019, Yeezy didn’t.
In the report, the company pushed back against such claims, noting that numbers actually rose in the fitness and basketball spheres.
The Financial Times also reported that Yeezy and all other partnerships within the company were reviewed as part of a formal risk management process.
Several other companies dropped Yeezy products from their stores as a result of West’s comments, including Balenciaga, Gap and Footlocker.
Last month Adidas announced it was investigating West, also known as Ye, following a Rolling Stone report that said he’d acted inappropriately around Yeezy staff.
It claimed that West showed workers explicit material of his ex-wife Kim Kardashian in a meeting, based on interviews with more than two dozen former Yeezy and Adidas staff.
The Rolling Stone report included claims by a former Yeezy worker that she witnessed Ye tell a young woman of color to sit on the floorduring an hours-long meeting. He allegedly told the designer that she didn’t “deserve to sit at the table.”
Adidas also revealed it had opened an investigation into Ye after reports surfaced that he had acted inappropriately with employees, showing them explicit photos of his ex-wife Kim Kardashian. Ye began his series of antisemitic remarks in early October and has since lost sponsorships and partnerships including with Vogue, Balenciaga, Foot Locker, Gap and J.P. Morgan.
Produced in association with Jewish News Syndicate.
(Additional reporting provided by and JNS Reporter)
Credit: Source link